tv Tom Donohue State of American Business Address CSPAN January 15, 2016 2:04am-2:48am EST
union. like any president would he puts the best possible face on a country's economic performance under his stewardship. what i would like to do this morning as look at how our economy, and the country are doing through the eyes of america's businesspeople. the reality they see is a little different than the picture portrayed by our political leaders in washington, d.c. they see an economy with some strength, but with many weaknesses. they see a country with a huge upside potential, but with many downside risks. they see an america that is stuck in the worst economic recovery since the great depression. with little forward momentum or dynamism. and they know we could be doing much better. much better than we are today.
corporate profits peaked some quarters ago. capital expenditures are down. relative to prior years. new small businesses are forming at the lowest rate in many years. they can't find the capital to get organized. for those that do have the capital, there's little reason to make big new investments that demand at home and especially abroad just is not there. for companies depending on exports, the strong dollar and weak growth abroad make them less competitive. for companies and countries that depend on the production, sale, and movement of energy and commodities, they saw the bottom drop out of the prices last year. how much lower will they go this year? most of our businesses would
like nothing better than to pay their employees more, hire more of them, and provide better benefits. but the current economy and the current government policies are making that very difficult. just one example. compliance with obamacare is costing companies a small fortune, and it is significantly driving up overall health care costs. when you add together americans who can't find jobs, who can't find full-time work, or who have given up looking, we're talking about nearly 10% of american workers. meanwhile, the workforce participation rate is at a four decade low. that plus the failure of congress to pass commonsense immigration reform means that we -- ort only a nation that
have people without jobs but we , have so many jobs in critical areas without people. i can tell you that businesspeople at large and small companies wake up each morning and wonder what the government is going to do to them today. the current administration is on a regulatory tear, and this will continue to the day the moving van backs up to the door at the white house next january. how do we know? they've been telling us every day since the first of the year. it has unleashed a runaway epa that is stretching the law and , in some cases breaking it. in order to assume control over the local economic development across america.
the administration has given us a labor department and national labor relations board that are against american job creators and in favor of their union , benefactors who now represent just 6.6% of the private work force. and so many regulators have been turned loose on our financial sector that banks have been distracted from their principal purpose, to provide credit and services that enable our businesses to grow and our entrepreneurs to thrive. it's not just the federal government that concerns the business community. state and local governments are piling new mandates, taxes, and costs on the backs of the private sector. we have an abusive enforcement
system at the federal level and in many states that is extorting billions of dollars from companies with little or no due process. meanwhile, governments at all levels are accumulating massive levels of debt and unfunded pension and entitlement liabilities. one day, unless there is reform, this whole house of cards can collapse. let's look for a moment beyond the shores of our great country. our key trading partners are struggling. europe, our largest export and trading partner, is barely keeping its head above water. japan is stagnant and in, it appears, another recession. brazil and venezuela are flirting with potential depressions.
the biggest question mark is china. global markets have already been roiled by the prospect of a reduction in china's growth from an unusually heady highs down to 4%, 5%, 6%. who says china could never have a recession of its own? this is a huge uncertainty for the global economy and it could , also impair internal chinese stability and regional geopolitics. speaking of geopolitics, business executives and owners read the same headlines that we all do. from the middle east to russia and eastern europe to the south china sea to north korea, there are more geopolitical hot spots than any of us can remember at one time in our lifetime. which one will flare up tomorrow
and disrupt economies, markets, , consumer confidence, travel, and very important, the global supply chains. add to that the threat of major terrorist attacks that could happen any time, any place. a nonstate terrorist group like isis has seized large swaths of territory. controls significant energy resources, and recruits and communicates through a sophisticated social media strategy. and then there are the many threats to our own cybersecurity. which have the potential to shut down companies, our critical infrastructure, and our very way of life. businesses and governments are already spending billions and billions of dollars to try to
shore up the defenses of our cybersystem. but everyone knows we're still vulnerable. and finally, ladies and gentlemen, we come to election year politics. we're in the middle of the most surprising and perplexing presidential campaign in modern history, and i would say in both parties. i used to call the lead up to the big national election as the silly season. but given some of the rhetoric and proposals we're hearing from both parties, it's not silly. it's damn serious, and sometimes a little scary. on one side, we have candidates promising to double down on the current administration policies, more spending, more
entitlements, more taxing, more regulating. i guess they figure that if something isn't working, just do more of it. does that make any sense? and then on the other side there are voices, sometimes very loud voices, who talk about walling off america from talent and trade, and who are attacking whole groups of people based not on their conduct, but on their ethnicity or religion. this is morally wrong and politically stupid. what businesses want to see in this campaign is a long overdue focus on economic growth. growing the economy, the economic pie is the only realistic way to create jobs. to lift incomes. to reduce inequality. and to expand opportunities for all americans.
and you know what? that's what the vast majority of voters, of both parties, want to hear about. jobs, growth, and opportunity. so when you add it all up, the state of american business in 2016 is filled with uncertainty, risk, and challenges. our businesses and job creators are facing extraordinary political and geopolitical uncertainty. economic weakness at home and especially abroad, and massive new regulatory burdens pouring out of washington and out of the state capitals. our country's unattached, unmatched potential and talent are going untapped. millions of unemployed, or underemployed americans are sitting on the sidelines. for their sake and for our sake we've got to get them back on
the field, back to work. it may be that the coming year looks a lot like the last 6 1/2 years. tepid growth of around 2%. but the downside risks are many and the upside factors are few. while a chamber is not, let me say again, not forecasting a recession, despite the many domestic and international difficulties, the last time we checked, no one had repealed the business cycle. the current weak recovery is getting a little long in the tooth. now don't get me wrong. while it's natural for business leaders to worry about the markets in which they most operate. my irish heritage means i'm optimistic about the future of this country.
we have tremendous capacities, talents, resources, opportunities, and freedoms that are simply unmatched anywhere on earth. but a positive future will not come automatically. it will not happen through divine intervention. it must work for -- we must work for it, and we must earn it. how do you do that? we can't wave away all the factors holding our economy back or eliminate all the , uncertainty. but we can fix bad policies and remove impediments in order to spur investment, jobs, growth, and opportunity. at the chamber, we follow the -- imagine this, more than 300 important issues on an ongoing basis. and we're going to continue to do so. but this year, we're going to put our greatest effort behind a
handful of key initiatives where we can make the greatest difference and the most progress. i'll lay them out for you in just a moment. some may ask whether the business community can expect to see any progress in washington this year. the honest answer is not as much as we would like. but probably more than you might expect. what happened in 2015, particularly near the end of the year, is instructive. a year ago, many commentators said that the government is too divided to get anything much done at all. the chamber and others thankfully ignored their predictions, and worked together and proved them wrong. working with others, we successfully advocated for trade promotion authority, an end to the outmoded oil export ban, a multiyear transportation
infrastructure bill, re-authorization of the ex-im bank a new education reform bill, the permanent extension of several tax provisions and multiyear extensions of many others. historic permit reform to speed up projects, and critical cybersecurity legislation. now let's not forget that most of these victories enjoyed strong bipartisan support and that's been a long time coming. i know how fashionable it is to always beat up on washington. but the fact is that the republicans and the democrats, our new house speaker paul ryan, senate majority leader mitch mcconnell, and the president himself all deserve some credit for the progress that was made at the end of 2015.
progress that was made at the end of 2015. we did it when everybody said it couldn't be done. so what air -- areas are we going to focus on most aggressively this year? first, at the tip of the spear, is politics. in 2016, the chamber will work in key states and districts to elect candidates who understand that it's the private sector, not the government, that creates jobs and prosperity. and that the overriding goal must be to expand the economic pie, not to simply redistribute it. working in close partnership with state and local chambers and associations, we'll back pro-growth candidates in upcoming primaries and in the
general election. the chamber's institute for legal reform will encourage an aggressive voter education program in states -- in state court and attorney general races. back to the congress, our goal is clear. our approach is simple. to protect the gains we made in the house and senate in 2014. by backing candidates who support pro-growth policies and a free enterprise system and who want to come to washington to govern, not just to shut the place down.
and while we will not be participating in the presidential race, we will weigh in on presidential policy proposals. if candidates choose to beat up on business, they will hear from us. next we're going to vigorously challenge the vast regulatory state and work to reform the regulatory system itself. the administration has already put business on notice that it's going for broke on regulations and executive orders in 2016. congress and economic growth be damned. in its final year, the administration plans to issue new or final rules that would restrict legal arbitration. create new and unworkable rules governing overtime pay. further regulate financial advisors. limit methane emissions from oil and gas drilling and add incredible complexities to our federal procurement process.
this is on top of the massive number of rules already choking the economy, including obamacare, a raft of e.p.a. measures, and dodd-frank. a third of whose regulations have yet to have been finalized. we'll be employing all of our tools to challenge overregulation, working in the agencies, working with congress through the appropriations process, which is now available to us, and the congressional review act and going to court. on obamacare, we're going to push for more common sense changes and work to preserve the employer based system that's the bedrock of american health care. we'll work to fully and permanently repeal the cadillac tax, the health insurance tax, and the medical device tax. we'll seek further targeted improvements to obamacare with the hope that major health care reforms will be considered in 2017.
on financial relationlations, the chamber calls our major regulatory reform even before the crisis. we call for it even before the economic problems. however, what we got instead in dodd-frank was an expansion of the maze of regulations and often conflicting regulations. it's astonishing with dodd-frank champions like elizabeth warren, they believe that a law this size and this scope must never be changed. that has never happened in this country. any law of that size has always had to be fixed. do they really believe that you achieve absolute perfection in a 2,300 page bill that was written in anger the first time around? we'll continue to work to fix the provisions that the law got
wrong. add the provisions that the law left out. and replace the provisions that we all know just don't work. we're going to support reform to the consumer financial protection bureau while insisting that it goes through normal processes to make rules. we will also place a particular focus on the department of labor's flawed fiduciary rule this rule could actually limit small businesses' access to retirement services or lock them out of the retirement market altogether. we're also working to modernize the regulatory system itself. the streamlining bill passed at the end of last year is a meager step forward. -- major step forward. it will help speed up projects without compromising safety.
passage of the regulatory accountability act will be key to our efforts. it would ensure that regulations costing over $1 billion would be very narrowly tailored, supported by credible data, and everyday, and impose the least possible burden on the american people while still implementing the intent of the congress. the regulatory challenges we face are not just national. they're global. for example, no sector holds such -- so much promise for america's future than technology. yet today our technology companies are facing a host of regulatory battles across the country and around the world. we must not allow the strong arm of government to put a choke hold on america's technology and innovation. one of the chief ways we're
going to push back on some regulations is through courtroom advocacy. you can be sure that our litigation center will be busier than ever in the final year of this administration. our law firm is already challenging the so-called clean power plan, the waters of u.s. rule, and the administration's new ozone rule. there will be many others. our litigation center will also be very active in dozens of supreme court, appellate court and state court cases with a special focus on curbing class action abuses and reining in irresponsible regulators. we were pleased that the supreme court appeared less willing in many cases to defer to the legal
interpretations of executive agencies like the i.r.s. and the equal employment opportunity commission and the e.p.a. we will work to remove barriers to growth by pursuing legal reform at the state and federal level. and we will push back, push back hard, on abuse of enforcement systems -- on abusive enforcement systems and the trial bartha sees every new regular leags as a multitude of regulation as a multitude of new opportunities to sue american companies. now in addition to politics and regulations, another key focus of the chamber in 2016 is trade. working together, we scored big wins in trade in 2015. the chamber and its allies helped win a huge fight over trade promotion authority. we successfully advocated for a major expansion of the 50 nation
information technology agreement that will end tariffs on $1.3 trillion worth of i.t. products. we were leading supporter of removing barriers to trade and travel with cuba and it's gratifying to see that effort, after all these years, finally bearing fruit. this year the chamber will build on these successes by vigorously supporting the transpacific partnership agreement. as we built support for the agreement, we will also be encouraging the administration to work with congress to address the legitimate concerns expressed by industries and legislators about some aspects of the deal. and we will continue to push for another potentially historic agreement that -- the
transatlantic trade and investment partnership with the e.u. both sides recently agreed to speed up the negotiations. amen. we're also working on trade and services agreements and pursuing bilateral investment treaties with china and india. we're urging the senate to pass the customs reauthorization bill and get it to the president's desk in a hurry. given the weakness in global demand, we must do everything possible to remove trade barriers. to form new commercial partnerships. and to aggressively market america's goods and services in traditional and, yes, nontraditional markets. the chamber is uniquely qualified to help american companies expand their markets and fill up their order books. we run 12 bilateral business
councils, maintain a network of 117 american chambers of commerce abroad and werest tab -- and we're establishing new offices overseas in places like turkey and israel. we're developing new bilateral councils with countries like cuba and we're leading high level commercial dialogues with china, mexico, and now saudi arabia. and we've just launched new african business center. we can never, ever forget that 95% of the world's customers, the ones we want to sell something to, live outside the united states and nearly 40 million american jobs depend on trade. we could create millions and millions more if we advance our pro-growth, pro-trade measures. now expanding america's energy supply is another one of these few but very important priorities where progress can
and must be made. we can and should be developing all kinds of energy and discriminating against none. we have untold amounts of american oil and gas and unleashing the power of our own energy will put our economy on a much stronger footing. as i mentioned, congress took a major step forward by lifting the ban on exporting u.s. oil. while prices will inevitably go up and down, we can count on the world's long-term need for energy to dramatically increase. you know, america is now in the position of supplying countries with the energy they need instead of importing it from nations that use their energy as leverage. by responsibly expanding production on federal lands, we can assure that we have the
energy we need to meet the needs of a growing economy and put folks back to work. now we want also to expand emission free sources like nuclear and renewable and press for greater gains in energy efficiency but we must end the regulatory assault on coal, which will be an integral part of america's energy for a long time to come. it's hard to have a discussion about energy these days without mentioning climate change. the chamber supports reasonable actions to deal with this in -- this and all environmental challenges but the focus ought to be on what has been proven to work. remember, the united states was the only country to meet the targets laid out years ago in the kyoto accords. even though we were one of the
only countries that didn't sign the agreement. how? we did it our way. we did it through technology. through efficiency. with alternatives and the cleaner use of traditional resources. let's build on what works. let's reject unproven schemes that would put the government in charge of our daily energy uses, our choices, and our lives. now, let me dare to go where most politicians fear to tread. the chamber is going to bang the drum loudly throughout 2016 and beyond on the urgent need for entitlement reform. americans should think very hard about this question. who are the real champions in entitlement programs?
like social security, medicare, medicaid? those arguing for absolutely no change except to increase benefits? or those who support constructive reforms in order to protect and sustain those benefits? if we do nothing, social security and medicare will become insolvent and sooner than you think. neither of them will be able to pay full benefits within 20 years. why? because 10,000 baby boomers retire every day. think about that. and will do so for years to come. by 2025, these programs, along with the interest on the debt, will gobble up about 77% of all federal spending.
without reform, there will be next to nothing left for other important national priorities like education and national defense. but if we make commonsense changes soon, we can ensure that the nation's social safety net remains intact for future generations. pundits and the political class are quick to dismiss all of this, dismiss the idea that any -- that anything possible condition done in entitlement. however, we're somewhat encouraged by the doc fix agreement we reached last year. the first significant entitlement reform in decades as well.
is this simple -- it is simple that there can be no solution to the nation's long-term fiscal imbalances and our exploding national debt that does not involve reforming social security, medicare, and for the state budgets, medicaid. this is perhaps the most predictable crisis that our nation faces. there are lots of others, but we know what this one is and when it will show up. shame on our government and shame on all of us if we don't make it an absolute priority for reform in both parties. now ladies and gentlemen, the fundamental question facing us today comes down to this -- how do we accelerate our growth and strengthen our economy so that it creates more jobs, rising incomes, and more opportunity for every american? that's why we're supporting these policies and these ideas.
not just to help business, but to help our country. during its more than 100-year history, the chamber and the business community it represents have stepped up to help the nation in times of great need. we did it by marshaling vast resources of the private sector to help win two world wars and the cold war. we did it by advancing pro-growth policies that created the strongest economy the world has ever known. we did it by supporting a strong national defense. and principled american leadership around the world. we did it through technology and the innovation that came with it and strong protection of intellectual property rights and set the pace for the rest of the world. we continue to do these things today by helping our government fight cyber attacks and terrorism.
by supporting our armed forces on active duty and our veterans an their spouses. and by projecting american ideas like free enterprise and the rule of law around the globe. we want america to be as good as we know it can be. we want all americans to have a genuine chance to thrive and succeed. we want policymakers and citizens alike to understand that a growing economy represents true compassion. how else could we ever hope to pay for a strong social safety net for the poor, the sick, and the elderly? in fact, it is the private sector that pays most of the bills in our society. for the schools, the clean environment, and a strong national defense. we're having more than just an election in 2016.
we're having a big debate over our nation's economic future. and the chamber will be right in the middle of it. we're going to respond to the growing attacks on our free enterprise system and america's businesses by folks on the left and the right as well. the left tells us that our economy is hopelessly rigged and that's the only reason some americans are doing well is because they have managed to rip off other americans. the solution is put -- is to put politicians, they say , in charge of our economy. how has that worked out wherever and whenever it's been tried? from the right we hear of crony capitalism, the notion that government spends all day, every day, figuring out how to help big business.
really? that's not the washington i know. and i've been around here for a long time. we're even seing a dangerous effort to silence the voice of business. to demonize and even criminalize different viewpoints and to actually rewrite the first amendment of the constitution. i don't use this phrase very often, but that's just plain un-american. if we succumb to the demands of political correctness, rewriting our history, air brushing the past, or censoring views that make us uncomfortable, then how can we learn from our mistakes and build on our successes? winston churchill, who seemed to understand americans better than many of our own citizens, once
said that some regard private enterprise as if it were a predatory tiger to be shot. others look upon it as a cow that can be milked. only a handful see it for what it really is. the strong horse that pulls the whole cart. ladies and gentlemen, private enterprise has been shot at enough. and it has been milked unmercifully. it's time to recognize that business can be the sturdy horse pulling the whole cart forward. just give us a chance to show the american people what we can do. today, americans are hungering for leadership. across all institutions and all sectors of our society, leadership that understands that a vibrant, private sector working in a free enterprise system built the greatest economy ever known on earth.
leadership that knows we're the envy of the world because we reward innovation and individual initiative. leadership that celebrate success and does not attack it. it embraces the principles of personal responsibility, limited government, and the right to take rational risk to fail, to succeed, to prosper. leadership that believes that business is not the problem, but a big part of the solution. this is a challenging and uncertain time for america. thatst reject the notion government has all the answers, or that we can isolate ourselves from people, trade, ideas, capital and responsibility across the globe.
the state of the american , andmy may be risky uncertain, but our future is not. it is bright. if we pursue the right priorities, and the right priority that policies. beyond weing year and will do everything we possibly can to win on these policies. that will create jobs and forced the growth and expand opportunity for every community. most important of all, we want all of our children, and our grandchildren, to know the we have not forsaken them. we are determined that they will know and america that is stronger and more prosperous, more confident, and more helpful and hopeful than ever before. i thought about this a deeply for a long time.
i am convinced it can be done. we will need all of your help. i thank you very much. [applause] >> ladies and gentlemen look in the state of america business press conference. he and bruce will take your questions. the only major ground rose please identify yourself and your organization when you are asking a question. please wait for the microphone. >> thank you very much.
mr. donohue: good morning everybody. as tom indicated, we are looking forward to taking your questions. a few minutes ago, i delivered the annual state of the american business. if you want to get to specifics. there is a copy on your place. i said in the speech that the chamber that the state of american business in 2016 is filled with risks and challenges. our businesses and job creators are facing extraordinary political and geo political uncertainty as they have to deal with economic weakness at home and especially abroad. it's a real problem. and massive regulatory burdens and we are being told even yesterday by the chief of staff who did the "christian science monitor" deal, that they are going to be really aggressive on what they are doing on the regulatory side. we can't eliminate all uncertainty. but with the recovery that is
probably the worst since the great depression, we have to go to work and do everything we can. we can get it done. i was very encouraged, as i said in the speech. by what got done at the end of 2015 in a bipartisan way on issues we have been told every day by people on the hill, by people in the press, by political operatives that it wouldn't get done. and we are go to go take a very aggressive approach going forward and hope to do. i'm skipping a lot of this because i'm getting to what you want to ask me. we made the point on the elections right now and going forward, regulatory stuff on trade. we're optimistic people.
we have a great country. we have great resources to advance our views. and we look forward to taking your questions. and i think we got two lined up and after that, it's all, i'll grab them. we can't remember without it. who's up. reporter: during your remarks when you were talking about candidates talking about free trade and the dangers singling groups, trump in particular, any particular candidate? >> it references anyone who in the process of the debates and we started with 17, bruce, who chose to go in that direction.